‘Downward spiral’ of unemployment blamed for Weston debt ‘crisis point’
- Credit: Archant
Twice as many people living in Weston are in debt compared with the UK average, a new report reveals.
A ‘downward spiral’ of unemployment and declining tourism has been blamed for the shocking statistic, which places Weston fifth on the list of the country’s most indebted constituencies.
More than 384 Westonians were registered as insolvent last year – meaning they are so deep in the red they cannot afford to pay back what they owe.
Figures from the Government’s Insolvency Service show the town is competing for the title of debt capital of the UK, with a personal insolvency rate of 43.4 in every 10,000 people.
Weston also has nearly four times the amount of debt recovery orders as the rest of the UK – with 173 new cases reported this year.
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Mike Smith, director of the insolvency firm Company Debt, says high levels of debt are a result of a lack of opportunity in the area.
He said: “Not only have the key coastal industries been in decline for several decades, tourism now faces furious competition from package deals to international destinations.
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“The South West’s ability to lift up its economic status is probably hampered by the fact that, given the lack of opportunity, the entrepreneurs and businesses start to think about relocating to different parts of the country.
“Once this becomes a trend, the downward spiral is inevitable.”
This trend shows no sign of abating. In the last year, Weston’s insolvency rate rose by more than 18 per cent.
Citizens Advice North Somerset says the problem has reached ‘crisis point’, after receiving 1,500 calls related to debt in the past 12 months – 320 of which were to do with debt recovery orders.
Fiona Cope, chief officer at Citizens Advice North Somerset, is urging people to contact the bureau for help managing their debt.
She said: “If your finances are getting on top of you and you’re struggling to pay your debts it’s crucial you seek support right away.
“We can help you work out what you can afford to repay, and negotiate with your creditors on how you will pay them.
“We can also offer advice on how you might be able to make savings, such as switching to a cheaper energy deal or mobile phone provider.”